Determining characteristics of a
Learning Objectives 1, 2 3. Accounts Payable $25,000 CR
Stone and Thombs are forming a partnership, Salem Leather Goods, to import merchandise from Spain. Stone is especially artistic and will travel to Spain to buy the merchandise. Thombs is a super salesman and has already lined up several department stores to sell the leather goods.
Requirements
1. What is the purpose of the partnership agreement?
2. If the partnership agreement does not state the profit-and-loss-sharing ratios, how will profits or losses be shared?
3. Stone is contributing $175,000 in cash and accounts payable of $25,000. Thombs is contributing a building that cost Thombs $65,000. The building’s current market value is $90,000. Journalize the contribution of the two partners.
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